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Amazon Builds Internal COVID-19 Testing Capability, May Cancel Holiday Promotions

Amazon is continuing to adapt to the challenges of COVID-19 in multiple ways as the influx of online orders adds stress to its fulfillment capabilities. The retailer now plans to scale up its coronavirus testing capabilities until it is capable of checking all employees, and The Wall Street Journal reports that the e-Commerce giant may cancel its Mother’s Day and Father’s Day promotions, according to people familiar with the matter.

Amazon wants to develop the ability to test all employees, regardless of whether or not they are showing symptoms, in order to minimize the spread of the disease. The retailer has been building its incremental capacity in a number of ways, including building a lab and reassigning some of its workers — including research scientists, program managers, procurement specialists and software engineers — to a dedicated testing team.

The World Health Organization also is working with Amazon to help track, research and contain the coronavirus across the world. The WHO is leveraging Amazon’s cloud technologies and technical expertise to build large-scale data lakes, aggregate epidemiological country data and rapidly translate medical training videos into different languages.

“Regular testing on a global scale, across all industries, would both help keep people safe and help get the economy back up and running,” said Jeff Bezos, CEO of Amazon in a letter to shareholders. “For this to work, we as a society would need vastly more testing capacity than is currently available. If every person could be tested regularly, it would make a huge difference in how we fight this virus. Those who test positive could be quarantined and cared for, and everyone who tests negative could re-enter the economy with confidence.”

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New Concern: Too Many Online Orders

In the meantime, social distancing has caused a massive rise in e-Commerce orders — and even Amazon’s fulfillment operation, bolstered by what will soon approach 175,000 new hires, is having trouble keeping up. The retailer already has barred receipt of non-essential items from marketplace sellers and suspended its third-party delivery service, and there are now reports that the company may delay Prime Day and cancel its Mother’s Day and Father’s Day promotions to prevent a sudden sales rush.

“The demand we are seeing for essential products has been and remains high,” said Bezos in the letter. “But unlike a predictable holiday surge, this spike occurred with little warning, creating major challenges for our suppliers and delivery network.”

The e-Commerce giant has reportedly created an internal “speed team” of senior executives, tasked with figuring out how and when Amazon can return to normal selection and delivery times, people familiar with the matter told The Wall Street Journal. The retailer also has reportedly reduced its advertising budget on Google to slow down traffic.

It may be more than two months before the company returns to pre-pandemic capacity and resumes shipping items in one to two days, though Amazon doesn’t expect many of the current changes to be permanent. Some of the changes may already be shifting back: for instance, third-party merchants may be able to resume shipping nonessential items this week, according to people familiar with the matter.

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